A ruined Soviet-era restaurant in Moscow's Gorky Park is to become the unlikely new home for one of Russia's hippest contemporary arts centres: the Garage, founded four years ago by the Russian socialite Dasha Zhukova.

Zhukova and the architect Rem Koolhaas have unveiled plans to bring back to life a 1960s prefabricated concrete building that would normally be pulled down. "It is the most exciting and biggest change the Garage has undergone," said Zhukova, revealing the plans at London's Institute of Contemporary Arts on Friday. "I think it will be one of the greatest examples of contemporary architecture in Moscow."

The hunt for a new building began because the lease was ending on the Garage's current home in the constructivist Bakhmetevsky bus garage and the site was due to be developed into a Jewish heritage museum.

"Finding it was a random chance," said Zhukova, the partner of billionaire Chelsea football club owner Roman Abramovich. "A friend of mine said there was a number of completely destroyed and damaged buildings in the park and that the city was looking to regenerate the park."

The Vremena Goda (Seasons of the Year) building has almost everything against it. Koolhaas said it was "a ruin, almost completely overgrown" on a heavily polluted site. It is also a rectangle, which is "currently not a very popular shape in architecture".

But the project fits into many of the themes and views Koolhaas has been expressing in recent years about modern architecture generally, and art galleries in particular. One thing he is fighting against is size, pointing to London's Serpentine Gallery as an example of small being good. "Art institutions are getting bigger and bigger, culminating in a building you all know [Tate Modern] but scale, for me, is not necessarily productive for art."

He is against the unnecessary destruction of buildings from the 1960s and 70s and does not like "the sterility of the white cube" in many galleries.

Koolhaas, who co-founded the OMA practice in 1975, said much of the neglect in the Vremena Goda was picturesque and he would keep much of the brickwork, tiling and mosaics. "The building is a ruin but it is not a very old ruin and there are still traces of decoration. We were able to convince our client to maintain some of the aesthetic and experiment – we have these traces of Russian history as a partner of the art."

That raises the question of whether non-white walls would fight or distract from the art on them. "That is a very long discussion," said Koolhaas. "I wouldn't propose it if I thought so." Having said that, all the exhibiting walls will be capable of becoming white.

The new 5,400 sq metre Garage Gorky Park is due to open next year with galleries on two levels together with cafe, shop and learning centre. Zhukova said the original plan had been to use a hexagon-shaped pavilion in the park, not far from the restaurant, but it would have taken too long to convert. That will now be phase two of their plans. "The Hexagon is in a much worse state and we've worked so hard over the last four years to build up a community around the Garage and establish an audience – we don't want to be homeless for two or three years."

Money for the Garage is understood to come from Zhukova's billionaire partner Abramovich but she batted away questions about the cost. "We don't talk about the finances," she said.

Zhukova is regularly featured in the British tabloids, probably not through choice, and despite the cynics there are plenty of people who would pay tribute to her achievements in establishing the Garage as a force in contemporary art. Artists to exhibit there include Antony Gormley and Christian Marclay, while at the end of last year it exhibited a major retrospective of the performance artist Marina Abramovic .

Zhukova said the Garage would still host exhibitions rather than developing a permanent collection and her "personal dream" was to have a show by the American sculptor Richard Serra, who makes some of the world's heaviest works of art. "He is an artist I am dying to bring to Moscow but nothing has been confirmed," she said. Whether the floors would take it is another question.